There’s lots of buzz in the news about the “tariff wars” between the United States and other countries. Without getting political, this week we will review exactly what tariffs are, why tariffs are levied, and what the changes to tariffs currently happening on products being imported to the United States means for our industry. Let’s get to it!
Unless you import and export a lot of things, you probably haven’t given much thought to tariffs since eleventh grade civics class. So, let’s start with a definition. What is a tariff? Merriam-Webster defines a tariff as, “a schedule of duties imposed by a government on imported or in some countries exported goods.” Basically, a tariff is a tax put onto a product imported into a country from another country. Up until recently, the average tariff on non-agricultural items imported into the United States was about 2 percent, and that was levied on about half of the products coming in. This encompasses a wide variety of products – everything from cars to sneakers.
In March of this year, President Trump announced an increase in tariffs on goods coming into the United States from many countries, including China. Of the thousands of products subject to the new tariffs, several impact our industry, including a 25% tariff on machines and parts for machines that make paper, paperboard, and convert paper into boxes and bags. In July of this year, that list was expanded to include a 10% tariff on thousands of additional items, including, “sacks, bags, nesoi including cones, of paper, paperboard, cellulose wadding or webs of cellulose fibers,” as well as, “sanitary food and beverage containers of paper, paperboard, cellulose wadding or webs of cellulose fibers.” That runs the gamut of paper bags and mailers, including concession and restaurant items, merchandise bags, SOS bags, and more. NOTE: All of WCI’s bags are made in the USA.
The Office of the United States Trade Representative is hearing arguments on this proposal until the end of August, so it’s still up in the air as to if and/or when the tariff will go into effect. In the short term, if you buy your bags overseas, be prepared for the price to go up at least 10% by September.